1986 in reference to companies shedding jobs; earlier (1975) in reference to U.S. automakers building smaller cars and trucks (supposedly a coinage at General Motors), from down (adv.) + size (v.). Related: Downsized; downsizing.

downsize definition

To reduce in number, especially personnel: “The company decided to downsize half the workers in the aircraft division.” It can also be used in reference to objects: “I decided to downsize my wardrobe and threw out all my old T-shirts.”

Note: Downsize is a recent euphemism for “fire, lay off.” Company managers often use this term in an attempt to soften the blow of wide-scale layoffs.